Application of Surrogate Accounting in Cost Effectiveness, Profitability, and Productivity

Abstract

A “surrogate†is someone or anything who acts in another person’s place. The use of “surrogate accounting†enables businesses to more easily provide both core and operational services. It is a good strategy and effective approach for replacing traditional methods of accounting and using alternative new techniques.

The focus of this article is to assess how surrogate accounting adaptations affect companies’ productivity, profitability, and cost-effectiveness. Applying regression analysis, it was found that the management of assets, consulting, Capex models, technology adoption, and business models are the most important accounting and business services of surrogate accounting to influence the financial performance of the firm. The model was tested with the Structural Equation Modeling (SEM) technique. It is found that surrogate accounting will enable organizations to control the cost and improve value addition.